Comparing the Bills: 
House Committee
Length of Extension:
Two years
Two years, possible third
Types of coverage included:
Property, casualty, workers’ compensation
Adds group life insurance to Senate list
Company deductibles:
One level for all types of insurance
Requirements vary by insurance lines:
2006: 17.5% of total premiums
2006: 17.5% of premiums for workers’ comp.; 20% for property, group life, 25% for casualty.
2007: 20% of premiums
2007 and beyond: 20% for workers’ comp., 22.5% for property, group life, 30% for casualty.
Sources: Senate Banking, Housing and Urban Affairs Committee, House Financial Services Committee

At issue is the 2002 Terrorism Risk Insurance Act (TRIA). Under the statute, a response to 2001 terrorist attacks, the federal government covers 90% of terrorism-related losses above an insurer-paid "deductible." Combined federal and insurer liability is capped at $100 billion.

The Senate on Nov. 18 approved a bill to continue TRIA through 2007. Two days earlier, the House Financial Services Committee cleared a measure that leaves the door open for a third year. The full House didn’t act before the recess. Besides their cutoff dates, the two bills have other differences, which would have to be reconciled after Congress returns in December. The House bill adds group life insurance to the types of coverage eligible for the backstop. The Senate excludes group life.

The Senate bill hikes insurers’ deductibles from 15% of annual premiums now, to 17.5% in 2006 and 20% in 2007. The House committee raises insurers’ share, but varies the levels: 17.5% in 2006 for workers’ compensation insurance, 20% for group life and property, and 25% for casualty.

Both bills increase the size of a terrorist event triggering the federal backstop, from the current $5 million in insured losses to $50 million in 2006 and $100 million in 2007. The House panel allows reductions below $100 million if losses exceed $1 billion.

The White House said Nov. 17 it supports the Senate bill but opposes adding group life or other insurance lines to the program.

Looking at the Senate and House versions, Kelly Knott, an Asso-ciated General Contractors’ govern-ment relations director, says, "We do not have a preference. We just want something passed so that construction can keep...growing and contributing to the economy."

Safety: Industry Praises, Unions Blast Senate Bills

Industry groups favor, but the AFL-CIO opposes, two workplace safety bills introduced Nov. 18 in the Senate. Sponsor Michael B. Enzi (R-Wyo.), Health, Education, Labor and Pensions Committee Chairman, says one aim is to boost voluntary safety compliance. One bill gives companies a two-year exemption from fines if a safety consultant certifies compliance with federal standards. Associated Builders and Contractors and National Federation of Independent Business like Enzi’s bills. But Peg Seminario, AFL-CIO safety and health director, says, "These are terrible measures," and contends they would weaken protection for workers. She says that, to labor, a third Enzi bill "is OK." It focuses on improving workplace hazard communication requirements.

Spending: Two FY06 Bills Unfinished

In a flurry of pre-Thanksgiving action, the House and Senate wrapped up more fiscal year 2006 appropriations measures, including the bill funding the Dept. of Transportation (see story, p.10). But when lawmakers return from their recess in December, they still have to finish the Defense and Labor-Health and Human Services bills. Appropriators suffered a setback when the House defeated the "Labor-H" bill on Nov. 17.

The Defense measure includes the military environmental restoration account. The Labor Dept. bill covers the Occupational Safety and Health Administration.

To keep agencies operating while waiting for 2006 spending bills to be signed into law, Congress passed a second continuing resolution, succeeding one that lapsed Nov 18. The new stopgap runs through Dec. 17.

Budget: House Bill Omits ANWR Drilling Provision

The fate of a White House-backed provision to open the Arctic National Wildlife Refuge to oil and gas exploration will be determined by House and Senate negotiators. The House Rules Committee dropped language allowing drilling in the Alaska refuge from a budget reconciliation measure. That won votes from GOP moderates and helped the budget measure to clear the House Nov. 18, by a 217-215 vote. The bill now goes to conference with the Senate, whose version permits drilling in ANWR.

he construction and insurance industries and others seeking an extension of the federal "backstop" for terrorism-related insurance claims will have to wait a little longer. Before the Thanksgiving break, Congress made progress on legislation to keep the program running past its Dec. 31 expiration, but didn’t reach a final resolution. What’s shaping up is an extension of at least two years that will require insurers to shoulder more of the risk and cost.